ii view: Wizz Air passengers and share price fly in opposite directions

Shares in this FTSE 250 airline have suffered a tough 2022 despite a recent increase in passenger numbers. We assess prospects. 

September passenger update

• Carried 4.34 million passengers in September, up 52% from September 2021 
• Load factor (percentage of available seating capacity filled with passengers) of 87.1%

ii round-up:

Wizz Air Holdings (LSE:WIZZ) made its maiden flight in May 2004 flying from Katowice in Poland to London Luton. 

Today it operates a fleet of 168 Airbus A320 and A321 aircraft. 

It is targeting a fleet of 500 aircraft by the end of the decade. 

For a round-up of this latest update on 4 October, please click here.

ii view:

Carrying over 27 million passengers in its last financial year the end of March, Wizz Air flies to over 150 airports in more than 40 countries, including many destinations across Central Europe. Competing against other airlines such as easyJet (LSE:EZJ) and Ryanair, it has halted flights to Russia and Ukraine because of the conflict there.  

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For investors, both geopolitical and economic outlook concerns cannot be forgotten, and there is always the risk that war in Ukraine could spread to nearby countries. A cocktail of high inflation, rising interest rates and a cost-of-living crisis now offer a tough backdrop. Some travel plans could be cancelled, businesses may revert to virtual meetings, as in the pandemic to save costs, while a price to net asset ratio above the three-year average could also suggest the shares are not obviously cheap.  

On the upside, a recovery in passenger numbers from the depths of the pandemic is being seen. An expansion of its network and aircraft numbers continues to be made, with an increase in its Italian operations its latest push. The young age and fuel efficiency of its aircraft fleet also enhance its environmental credentials. 

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While the public wants to travel again following the pandemic, the high degree of geopolitical and economic uncertainty is reason for caution. Wizz Air shares currently trade at a six-year low, with investors preferring greater clarity before committing more capital here.  

Positives: 

• Strong focus on costs
• Positive environmental credentials

Negatives:

• Operations hit by Ukraine conflict
• Uncertain economic and geopolitical outlook

The average rating of stock market analysts:

Buy